Cases & Deals

Daikin wins complete jury verdict on alleged marketing misrepresentations regarding its premier HVAC product

Clients Daikin Industries, Ltd.

After a two-week trial of two separate, but consolidated cases in federal court in Massachusetts, Jones Day won a complete defense verdict for Daikin (AC) Americas Inc. The jury took only 70 minutes (including lunch) to reach its unanimous verdict.

The plaintiffs are owners of adjoining 10,000 and 20,000 square foot mansions in the Back Bay of Boston. One, Evans, is the chairman of Vanderbilt University's board, a member of thirteen public boards, and former chairman of Summit Partners. The other, Egan, is CEO of Carruth Capital and former ambassador to the OECD in Paris. Both had independently purchased Daikin VRV heating and cooling systems. Daikin is the world's largest HVAC company, and VRV systems are its premier product.

Each room in each house is a separate zone, and each room in the systems has a separate fan coil unit hidden in the ceiling. Several years after installation, and over the course of several additional years, coils in each house corroded and leaked refrigerant. Each time that happened, the heating and cooling system failed. The plaintiffs, based largely on the testimony of a famous M.I.T. professor, argued that the system suffered a design defect (stray current corrosion), and that the brochures promising continuous reliability were fraudulent. Jones Day demonstrated, to the contrary, that the system was exceptional; that the plaintiffs' theory was based on junk science; and that the cause of the corrosion and failures was the off-gassing of formaldehyde and other organic acids, a problem caused by the plaintiffs' contractors' failure to ensure the units were installed in a non-corrosive environment, properly ventilated, and routinely serviced.

Each set of plaintiffs sought several million dollars for out-of-pocket repair expenses and the complete removal and replacement of their Daikin systems, which would have entailed a one-year, substantial deconstruction and reconstruction of each house.

Evans, et al. v. Daikin North America LLC, et al., No. 1-17-cv-10108 (D. Mass.); Egan, et al. v. Daikin North America LLC, et al., No. 1-17-cv-11630 (D. Mass.)